A Brazilian government commission visited Buenos Aires (Argentina) last Friday at a meeting with Secretary of Domestic Trade in Argentina, Guillermo Moreno. The expectation was to solve import problems and export between the two countries, which meant Argentina reducing restrictions on Brazilian products and Brazil would withdraw retaliations to the neighbouring country. Besides having ended without agreement, the meeting gave rise to conflicting information about the trade dispute.
Benedito Rosa, director of the Ministry of Agriculture, Fisheries and Food Supply (MAPA) of Brazil, says the decision to bar Argentine apples has nothing to do with the controversial decisions of the Kirchner government. "There is a plant health problem. We detected the presence of Cydia pomonella, which needs the proper inspection, despite the circumstantial trade scenario," he says. The initial measures taken which caused the fruit to lose the import license was published in the Official Journal of the Union last Friday, to "reduce the risk of introducing pests with potential to generate economic losses for Brazil.
But the Argentine Chamber of Integrated Fruit Growers (CAFI) says it received no official notification in this regard and that they had been working with the version that meant apples, pears and quinces had their licenses suspended by trade disputes.
A month ago, Brazil placed ten Argentine perishable products under the system of prior import license: apple, cheese, olives, raisins, pre-cooked potatoes, among others. So far, nothing has been said about health risks, farmers assured. In the case of apples, several importing companies in Brazil had already placed orders and trucks were coming. When they reached the border, they were surprised by the news that they had to have a permit to enter Brazil, which no one had.
A month ago, Brazil placed ten Argentine perishable products under the system of prior import license: apple, cheese, olives, raisins, pre-cooked potatoes, among others. So far, nothing has been said about health risks, farmers assured. In the case of apples, several importing companies in Brazil had already placed orders and trucks were coming. When they reached the border, they were surprised by the news that they had to have a permit to enter Brazil, which no one had.
Several companies have had tons of apples at the border since last month. Losses reach USD 2 million a day, say producers. In the packing zones, that depend on purchase orders for the apples to be taken out of the cooling and then placed in boxes, there are few people working. According to a member of a local cooperative, the lack of employment and uncertainty for the coming months is generating panic among workers.
A report by the IG Alto Valley region, indicates that in Patagonia, where 100% of apples for export are produced, they have enormous amounts of direct customers in Brazil. Last season's harvest in March, suffered from hail. Frost damaged part of the production and resulted in a 30% drop in sales for the first semester. Production that was usually directed to the northern hemisphere. Therefore there was great expectation for the production destined for Brazil, a country that is the main buyer for the second semester (63% of the apples that are imported by Brazilians come from Argentina).
"Restriction caused problems for us and as well for our clients in Brazil. They have less time to sell the product, that can arrive with lower quality for consumers. There are many Brazilian companies that have their sales structured, counting on Argentine apples," says Oscar Martin, president of CAFI.
Some of the fruit that is not sold in Brazil will be re-directed to the local market, which may have an oversupply and fall in prices. The IG stayed in the region for two days before having their publication printed in the Official Journal, when pears had not been prohibited. "It would be disastrous if this were to reach pears. We are up to our necks," said Pablo Kleppe, director of the company, which was founded by his grandfather nearly 80 years ago. On the day following of his declaration, pears were included in the block.
Import licenses will always exist in the case of Argentine apples imported by Brazil. Before the process was faster
and within hours an order could be released. Now, they can take up to 60 days. A month after the block, no authorization had been granted, except for trucks that had help from the resources of Brazilian importers with the law. "Argentina and Brazil have to be more complementary an not fight," says Jorge Cervi, director of the Cervi, one of the best-selling brands of apples in Brazil.
Import licenses will always exist in the case of Argentine apples imported by Brazil. Before the process was faster
and within hours an order could be released. Now, they can take up to 60 days. A month after the block, no authorization had been granted, except for trucks that had help from the resources of Brazilian importers with the law. "Argentina and Brazil have to be more complementary an not fight," says Jorge Cervi, director of the Cervi, one of the best-selling brands of apples in Brazil.
In addition, shipments of apples come from Chile, an indirect member of Mercosur, enter every day to Brazil. "We are terribly affected and is Chile absurdly benefited. We were partners, and today it seems that we are enemies. Meanwhile, we lose perishable products," said the president of CAFI. "This is one of the most affected sectors by the barriers to imports," analyzes Alejandro Ovando, an economist at the consulting company IES. In value, losses already amount to 24.2% compared to exports from 2011.
Argentina is the largest pear exporter in the Southern Hemisphere and the fifth largest producer of apples in the world.
Source: IG